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Strategies & Market Trends : The Covered Calls for Dummies Thread
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To: JohnM who wrote (3942)8/28/2002 2:22:00 PM
From: DiB  Read Replies (1) of 5205
 
John,
you write: "if not called, they will produce X%", or "Return on uncalled is Y%"

I don't think you can call X% or Y% as "return". These numbers show downside protection, but not return. Hence a question: when you're not called on a stock, but its price is above your breakeven point, do you normally sell the shares the following Monday, or look to resell more calls?

I've been doing similar thing past several months, with the difference that I look for calls with better downside protection. Thus I settle for closest ITM calls one or two months out on 4-5 stocks I don't mind holding long term that developed some sort of a base. Usually they give about 5-10% return if called, and if not - a good opportunity to get a great return next month or two.
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